29 June 2009 | Allie Anderson
Councils could save £2.8 billion in the next two years through effective procurement, a government minister has said.
In his first speech as secretary of state for Communities and Local Government, John Denham [pictured] said local authorities must re-evaluate not just how much they spend, but how those services are provided.
Speaking at the Chartered Institute of Public Finance and Accountancy conference last week, he said money should be spent with "one eye on the customer and the other on the future".
He said while councils have been tasked with making efficiency savings (a total of £5.5 billion by 2011) there's no reason it should result in poorer services. Instead, he said, public procurement can help foster innovation and support local businesses. Buyers can also challenge suppliers and contractors to create apprenticeships and training schemes. "In this way, each taxpayers' pound can bring a benefit today, and one tomorrow."
Denham emphasised the estimated £42 billion local government spends on the procurement of goods and services each year - £688 for every person in the UK.
"This money can just buy a standard service at the lowest possible cost - or it can be used to encourage businesses, including local businesses, to provide innovative solutions which deliver better value for money.
"This is a huge opportunity for local government to show the rest of the public sector the way."
Denham praised local authorities for creating an additional 7,500 apprenticeships, doubling the previous number offered, but also stressed the importance of helping to support local businesses if taxpayers are to get value for money.
"Councils must be able to promise residents that every taxpayer's pound will work as hard for them as taxpayers worked to earn it in the first place."